Transforming growth factor type-beta (TGF-beta) is a member of a large family of polypeptides which play an important role in the regulation of normal cell growth and differentiation. Alterations in the ability to respond to TGF-beta may be involved in the loss of growth control associated with tumor development. We have observed that differentiated tracheal epithelial cells sloughed into the culture medium can activate latent TGF-beta. The ability to activate TGF-beta was not observed in cultured preneoplastic or neoplastic tracheal cells. Given the importance of the activation step in regulation of cellular responses to TGF-beta the following questions will be addressed: (a) Do differentiated cells within the intact tissue have the capacity to activate latent TGF-beta? (b) Do differentiated cells harvested from tumorigenic populations grown in vivo or in culture exhibit the capacity to activate TGF-beta? (c) Do differentiated cells from other tissues likewise exhibit the capacity to activate TGF-beta either in culture or within the intact tissue? (d) What factor associated with differentiated tracheal cells activates latent TGF-beta? At present much of the information concerning the cellular response to TGF-beta has been obtained with cultured cells. In the proposed experiments the relevance of these observations to the intact tissue will be evaluated. In particular, the following will be investigated:(a) What cell population in the intact tissue binds TGF-beta? (b) What cell population within the intact tissue responds to TGF-beta? (c) Does communication between contacting cells affect the cellular response to TGF-beta? (d) Does the effect of TGF-beta on nonepithelial stromal cells indirectly affect the response of epithelial cells within the same tissue? (e) Does cell shape affect the binding and/or response to TGF- beta in culture? The proposed experiments are designed to test the following working hypothesis. Latent TGF-beta is produced by basal cells. Latent TGF-beta is then activated by differentiated cells within the tissue. Activated TGF-beta in turn regulates proliferation of stem cells. During neoplastic progression there is a break at some point(s) in this negative feedback loop.